Correlation Between IShares Core and IShares Gold
Can any of the company-specific risk be diversified away by investing in both IShares Core and IShares Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares Core and IShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SPTSX and iShares Gold Bullion, you can compare the effects of market volatilities on IShares Core and IShares Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Core with a short position of IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and IShares Gold.
Diversification Opportunities for IShares Core and IShares Gold
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and IShares is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and iShares Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Gold Bullion and IShares Core is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Core SPTSX are associated (or correlated) with IShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Gold Bullion has no effect on the direction of IShares Core i.e., IShares Core and IShares Gold go up and down completely randomly.
Pair Corralation between IShares Core and IShares Gold
Assuming the 90 days trading horizon iShares Core SPTSX is expected to generate 0.47 times more return on investment than IShares Gold. However, iShares Core SPTSX is 2.13 times less risky than IShares Gold. It trades about 0.3 of its potential returns per unit of risk. iShares Gold Bullion is currently generating about -0.13 per unit of risk. If you would invest 3,916 in iShares Core SPTSX on August 28, 2024 and sell it today you would earn a total of 143.00 from holding iShares Core SPTSX or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SPTSX vs. iShares Gold Bullion
Performance |
| Timeline |
| iShares Core SPTSX |
| iShares Gold Bullion |
IShares Core and IShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and IShares Gold
The main advantage of trading using opposite IShares Core and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, IShares Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Gold will offset losses from the drop in IShares Gold's long position.| IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares Core SP | IShares Core vs. iShares SPTSX Composite | IShares Core vs. iShares Core MSCI |
| IShares Gold vs. Global Atomic Corp | IShares Gold vs. enCore Energy Corp | IShares Gold vs. Fission Uranium Corp | IShares Gold vs. NexGen Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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